Sunday, March 8, 2009

Benefits for all

IT Process Improvement is a sadly neglected element of most every organization. A common misconception is that only hard-core IT companies need bother with enhancing their IT processes. The truth of the matter is that in today’s age of increasing dependence by the business on technology, the optimization of IT is crucial for any organization in any industry and not just a Microsoft or IBM or Wipro.

A common misconception is that IT process improvement is limited to the IT department only with no interaction with the other departments of the organization. The belief is that adjustments to the SDLC methodology (or RUP or whatever the IT dept uses) is the only domain of IT process improvement. While this is definitely an area that the IT process expert would apply his or her energies to, improving and aligning the IT department’s services to the rest of the organization is also part of their task. In fact it is the fundamental task from a revenue generation point of view.

Let us for a moment consider a company that produces steel rods. No fancy software being produced. No high tech outsourcing – just steel rods, three feet in length, being produced. Let us consider some of the departments within this organization as shown in the figure below:

Now let us consider some of the interactions taking place. The various departments will require communication with each other as well as interaction with outside stakeholders such as customers, suppliers and contractors. In today’s day and age, a well structured network and email will take care of basic communication needs. This network and email setup will need to be deployed and maintained. Over and above this, a comprehensive ERP and CRM application will be needed to manage the resources, activities and information within departments and external organizations. The proper selection, deployment and maintenance of this application will then need to be performed. Furthermore, the machinery used in the production of the pipes will have their own software application written in a proprietary CAD language which will then require skilled personnel to maintain and operate the machinery and the related software. There may be custom applications that have to be designed, developed, deployed and maintained.

While we can go on and on, what already emerges is that a great deal of Information Technology (defined last week as the use of computers and software to convert, store, protect, process, transmit and retrieve data within an organization) will need to be applied and attended to.

Now let us consider two competing steel pipe companies. They both obtain the same raw materials at the same cost. The number and quality of the personnel employed by the two companies is about the same as is their size and infrastructure. Company A takes its IT processes seriously and is constantly seeking to improve and evolve them, whereas, Company B is lackadaisical about its IT claiming “we don’t need to worry about all that tech gobbledygook – we make steel pipes for heaven’s sake!”

Company A utilizing effective Change Management, Configuration Management, Capacity Management, Service Level Management, Supplier Management, Service Continuity Management, Availability Management etc. and implementing improvement initiatives like Six Sigma will enjoy the following benefits over Company B:

  • Improved resource utilization

  • Decrease in defects/rework

  • Elimination of redundant work

  • Improved project deliverables including schedule

  • Improved availability, reliability and security of IT services

  • Improved service quality which translates into improved finished product quality (superior IT provided to the pipe manufacturing dept results in superior pipes being manufactured)

  • Services aligned to customer demands which leads to improved customer satisfaction

  • Integration of central processes

  • Effective documentation and common terminology that helps with repeatability

  • Effective metrics that help in understanding the status of processes and production in the organization

  • Continuous process, product and service improvement

All other factors being equal, (cost of raw material etc.) this will then translate into higher sales and increased profits for Company A.

So it becomes apparent that even in a “non-IT” organization like a steel pipe manufacturing firm, IT processes and their constant improvement are crucial ways to gain a competitive advantage. And in a case of highly technical IT companies like Microsoft, Adobe, Wipro etc. the importance of IT processes and their improvement is even more significant. The difference between a Microsoft and our steel pipe company is that not only does Microsoft’s IT have to service its internal customers, it creates products and services for external customers as well. The IT at the steel pipe company only services the internal customers (i.e. the various departments within the organization). Other than that, the IT departments are the same in what they fundamentally do in both organizations.

It is usually a surprise to most folks that the ITIL body of knowledge was first implemented in a significant way by the hotel/hospitality and airline industries. After gaining maturity and delivering positive results while being utilized by these industries, the IT world caught on and began to implement ITIL more seriously. This is not surprising when you consider that the goal of ITIL is to align IT with the business and to constantly improve processes and services being provided.

To summarize, IT process improvement is a significant technique that all companies that have evolved beyond manila folders and calculators must utilize to stay competitive.


  1. Nice blog.
    Your posts are very accurate
    There probably aren't too many places out there that don't use IT.


  2. Good article, well articulate.

  3. Good Article, well articulated.